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Government sends additional money to farmers

AFTER the European Commission released only €2.46 million to help farmers in Slovakia suffering from a decline in milk prices, the Slovak cabinet allocated an additional €16.1 million to keep the country's dairy sector afloat.

The Slovak Agricultural and Food Chamber (SPPK) welcomes the support but calls for adoption of systemic measures.

“Current losses of our dairy cow farmers are about 13 cents per litre of milk,” Jana Holéciová, spokeswoman of SPPK wrote in the chamber’s press release. “The support of the EC accounts for 0.3 cent per litre of milk. Also because of this the assistance of the cabinet has arrived at the very best moment.”

The Robert Fico cabinet allocated an additional €117 of support per cow on September 16 which adds up to €16.1 million in total. Along with €2.46 million Slovak farmers should get from Brussels, this support should help farmers stabilise dairy cow farming and patch up their losses caused by a drop in milk prices, due to excess milk on the market.

In Slovakia there are more that 137,000 dairy cows and the cabinet has increased the average support from €81 per cow to €379 during recent years, said Agriculture Minister Ľubomír Jahnátek. He believes that an additional €117 per dairy cow will discourage the liquidation of herds. Jahnátek stressed that the support is not for milk prices but for stabilisation of breeding and farming. The dairy cow farming sector employs about 13,000 people in Slovakia.

Farmers welcome the support

The Slovak Agricultural and Food Chamber welcomes the support as well as the short time in which the cabinet dealt with the proposal when EU ministers agreed upon distribution of the support earlier this week.

“Thanks to the speedy solution and payment of money already this year milk producers will be able to cover at least some of their losses caused by the drop in milk prices,” Holéciová wrote, adding that some dairy cow farmers were already pondering that they would not breed their animals for milking but rather for meat production, while the worst scenario was that they would stop breeding dairy cows altogether. This would not only result in a drop in dairy cows and fall in milk production but also in lower employment in the countryside.

Originally SPPK required additional funds of €150 per dairy cow.

SPPK sees the reasons of the crisis in milk production in the Russian embargo, cancelation of milk quotas within the EU as of April 1 and decreasing demand of the Chinese market for powdered milk.

“There is an excess of milk on the European market and its price is falling,” said Holéciová, adding that the average price of raw milk was 26.43 cents per litre in July.

Slovak farmers make a loss of 13 cents per litre of raw milk and according to the latest SPPK information, farmers have made an aggregate loss of €27 million during the first seven months of this year.

Cost of production of one litre of milk in Slovakia is about 40 cents while before spring 2014 Slovak farmers were selling milk for 36 cents per litre.

Support from the EC

Out of €500 million in assistance, the EC distributed €420 million among EU member countries, while a remaining €20 million will go for food for migrants, €50 million for stabilisation of the market and €10 million for advertisement of dairy products, according to Jahnátek. He voiced his dissatisfaction with the low assistance allocated for Slovakia, but added that actually no country was satisfied. He believes that only sensible systemic measures can solve the situation.

“We are currently solving the crisis with a crisis measure,” said Jahnátek. “The crisis measure is to stabilise the sector in order that farmers do not liquidate dairy cows and thus also work places.”

After the Agriculture Ministry lifted its embargo, it turned out that the companies of Italians suspected of ties with ’Ndrangheta received subsidies worth millions of euros, through the Agricultural Paying Agency.